This paper reviews the supply chain management practices of Amazon.com (AMZN) and highlights findings in the framework of a Strengths – Weaknesses – Opportunities – Threats (SWOT) framework.
AMZN opened its virtual doors on the World Wide Web in July 1995 as a web based bookseller and today offers Earth’s Biggest Selection according to the company’s 2012 annual report to shareholders. AMZN’s vision statement is to be Earth’s most customer-centric company for four primary customer sets: consumers, sellers, enterprises, and content creators. AMZN has organized its operations into two principal segments: North America and International. Figure 2 below shows AMZN’s net sales for the last three years reported.
Figure 1: AMZN Net Sales Source: Amazon.com 2012 annual report
The products offered on AMZN’s consumer-facing websites primarily include merchandise and content AMZN has purchased for resale from vendors and those offered by third-party sellers, and AMZN also manufactures and sells Kindle devices, a tablet device that runs a custom version of the Android operating system. AMZN offers other services such as Amazon Web Services (AWS), fulfillment, publishing, digital content subscriptions, advertising, and co-branded credit cards. AMZN employed approximately 88,400 full-time and part-time employees at December 31, 2012. Consolidated net sales for AMZN was $61 Billion with the North America segment accounting for 57% of the total. Some historical events over AMZN’s existence are noted below.
• July 1994 – Company is incorporated, headquartered out of Jeff Bezos’ garage.
• July 1995 – Amazon.com sells its first book: Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanism of Thought
• October 1997 – Amazon’s one-millionth customer places order, which is hand-delivered by Jeff Bezos to customer in Japan
• June 1999 – Ten-millionth customer served
• December 2005 – Customers order over 108 million items worldwide during Amazon’s 11th holiday season
• November 2007 – Amazon introduces Amazon Kindle
• September 2011 – Amazon introduces Kindle Fire, Kindle Touch and Kindle Touch 3G
AMZN’s unwavering strategy is focused on selection, price, and convenience. AMZN serves consumers directly via its retail websites, which offers millions of unique products across many categories sold directly by AMZN or via its vast network of third party sellers. Regardless of who is actually providing the product AMZN provides excellent user interfaces, seamless fulfillment, and world class customer service. Similar to Wal-Mart’s everyday low price strategy, AMZN strives to offer its customers the lowest prices possible through low everyday product pricing and shipping offers.
Maintaining a high level of customer satisfaction is paramount to any business that operates in a competitive environment. Customer centricity, world class service, and relationship management are areas where leaders separate from laggards. Disney is a...